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Starting a new practice FAQ:

Legal/Malpractice



One of the primary reason physicians need to keep medical records on hand is to protect themselves in the event of a malpractice lawsuit. While statutes of limitations exist for malpractice and wrongful death claims, there are numerous ways of getting around such time limitations. Thus, the ideal is to keep medical records in perpetuity.

If maintaining records indefinitely is not practical, your practice should establish a consistent policy on records maintenance that outlines how long you maintain records. Some of the rules of thumb that you might want to follow for maintaining records include:

- Routine records: a minimum of 10 years after the date of last service
- Records of deceased patients: 8 years beyond date of death
- Records of minor patients: until patient reaches at least 19 years of age

Records should be maintained for additional years when a patient:
- has experienced significant surgical complications;
- was treated for cancer or heart disease;
- had traumatic injuries that did or could result in a disability;
- was followed for a pregnancy.

Certain exceptions to this policy apply, particularly as it relates to persons exposed to toxic substances or harmful physician agents. OSHA rules require that medical records must be retained for the duration of employment plus 30 years. (CMA On-Call document 1160, page 2).

In general, you know your patients. The safest way to proceed is to maintain the charts of patients with complicated medical histories indefinitely. If you have any questions about medical records maintenance, contact your liability carrier.

Patient record issues in fee-for-service settings, where patient lives aren't assigned, are sometimes just as tricky as transferring managed care panels. If you are setting up a new practice and patients need their medical records, you may request that they be transferred from the old practice to the new. The practice is under no obligation to you, the physician, to provide patient records, however.

When a practice is not being forthcoming with medical record transfers, it is best to have patients request their own records. According to §123100 of the Health and Safety Code, physicians are obligated to provide patients with access to their medical records. Patients must be granted review of their medical records within five days of receipt of written notice, and medical record copies must be furnished within 15 days. (Practices may charge $.25/page for furnishing copies.) Failure to provide patients with their medical records amounts to unprofessional conduct.
According to California Business and Professions Codes 2395 and 2396, physicians responding to emergencies on a volunteer basis to care for people who are not their patients are generally protected from liability. The same holds true for physicians volunteering at school athletic events. This isn't a substitute for malpractice insurance, however. You could be sued and need to defend yourself, though the law is likely to be on your side. For more information on this issue you should contact your malpractice carrier or go to The CMA Website and download CMA On-Call document number 0820, Good Samaritan and Other Immunities.
According to California law, physicians need to report patients with conditions associated with "lapses of consciousness" to their local health officer. The health officer must then report that condition directly to the DMV. The DMV is then left to investigate the patient's capabilities and make a determination about the patient's license status.

California's Code of Regulations (Chapter 17, Section 2806) provides the following definition:
(a) "Disorders characterized by lapses of consciousness" means those medical conditions that involve:
(1) a loss of consciousness or a marked reduction of alertness or responsiveness to external stimuli; and
(2) the inability to perform one or more activities of daily living; and
(3) the impairment of the sensory motor functions used to operate a motor vehicle.

(b) Examples of medical conditions that do not always, but may progress to the level of functional severity described in subsection (a) of this section include Alzheimer's disease and related disorders, seizure disorders, brain tumors, narcolepsy, sleep apnea, and abnormal metabolic states, including hypo- and hyperglycemia associated with diabetes.

Note that all three (#1 - 3) must be present to force a report. "Sensory motor functions" refers to a patient's ability to physically respond to external sensations (sight, sound, etc.), like seeing a yellow light and hitting the brake pedal.
Malpractice insurance is supposed to protect you from the legal and financial risks inherent in the practice of medicine. The two most important qualities in an insurance company are that it be financially sound and that the company be responsive to the needs and concerns of insureds. A.M. Best or Weiss Ratings can provide you with information about malpractice company ratings. You want to work with a company rated "A" or better.

Here are some of the questions to ask when evaluating malpractice carriers and their policies:
- What are the available policy limits, and how much does coverage for someone in my specialty cost?
- Are there premium discounts for good claims experience and/or attendance at risk management seminars?
- What types of coverage are available, such as peer review or Medical Board defense?
- How is defense counsel assigned to a malpractice case. Do I have any say in the process?
- What role would I play in determining whether to accept any settlement offer made in my case?
- What are the company's routine policy exclusions?
- How many insureds does the company have in California and nationwide, and what is the breakdown by specialty? How long has the company been in existence?
The California Academy of Family Physicians recommends several malpractice companies to its members. These include:
Cooperative of American Physicians: (800) 356-5672
The Doctors Company: (800) 421-2368
Medical Insurance Exchange of California (MIEC): (800) 227-4527
, (800) 652-1051
It is very important that you maintain continuous malpractice coverage throughout your career in family medicine. California has a claims-made insurance market. You can be sued but not be covered for your defense if you receive notice of a lawsuit for something that happened while you were insured, but have already terminated your policy with that insurance company. Tail insurance is supplemental coverage to a claims-made policy for incidents that happened under an old malpractice policy.

When switching insurance companies, be sure to obtain tail coverage from your old company or nose coverage (for prior acts) from the new company. Tail coverage can either last for a certain amount of time or be unlimited. You may need to have been with the insurance company for a certain amount of time before you can purchase it. Tail insurance usually costs between 175 and 200 percent of your last annual premium, and is typically only available for a short period of time after a policy expires, generally 60 to 90 days.

Many companies have provisions for "forgiving the tail" in situations of death, permanent disability, or retirement. Be sure to investigate these provisions carefully for vesting requirements, age limits, etc.

Think that the company that carries your malpractice insurance and tail coverage isn't important? Think again. CAFP recently fielded a call from a retired physician whose malpractice tail carrier had gone out of business some 10 years before. Because he was not actively practicing, he couldn't find another source of insurance. Lo and behold, he received notice of intent to sue some 20 years after the act had been committed, potentially compromising the security of his retirement. Don't let this happen to you. Choose wisely and make sure that the malpractice company is well-respected and fiscally sound.
Since price shouldn't be your top consideration in choosing a malpractice insurer, you should carefully weigh the benefits and drawbacks of switching malpractice carriers. Malpractice rates are determined based on an insurer's claims and loss experience according to specialty. Thus the simplest explanation for a rate increase is that the company realized larger than expected losses in the previous year, and needs to rebuild its reserves. Having adequate financial reserves is a critical component of the insurance business. Over the long term, you want to make sure that your malpractice insurer is in sound financial health. A.M. Best or Weiss Ratings can provide you with information about malpractice company ratings.

Another reason for an increase may be due to the length of time the policy has been in force. New physicians only have one or two years worth of patient care for which they need malpractice insurance. This is reflected by pricing--claims made policies are priced low the first year and increase in a series of ‘steps' over the first four to six years. After this point, annual premiums should be relatively stable, as the physician is considered to be at a mature level of exposure.

The vast majority of policies written in California are written on a "claims-made" basis. This means that you are only covered for malpractice incidents that take place during the period that your policy is in force. When you terminate a claims-made policy, the coverage for all care given during the time of that policy ends, thus you will need to purchase "prior acts" coverage either from the former insurer (tail coverage) or your new insurer (nose coverage). This is an often overlooked cost of switching malpractice carriers. Tail coverage rates are a factor of the last year's annual premium, generally around 175 to 200%.

Two other arguments against switching companies (often, policies allow for free or low-cost tail coverage upon retirement, but this requires a certain number of years vesting). And, your loss ratio (the number of years in practice divided by the number of claims against you) will be smaller the longer you are insured with a company.